Microsoft marks a significant milestone in 2025—50 years of inspiring innovation and technology solutions that empower people and organizations to achieve more. Though we often focus on the end product—those software solutions from the early days to the evolution of our leading cloud-based business—equally important is the way we get our world-class products into the hands of our customers. As our technology has evolved, so have the ways in which we sell it. We’ve moved beyond transactional agreements and now focus on customized, solution-based selling to meet the growing demands of our partners and customers. In doing this, we have created deeper relationships and greater opportunities, transforming businesses along the way.
Now, more than ever, with the small and midsize enterprise market rapidly expanding and cloud adoption accelerating, partners have a significant opportunity to drive growth by prioritizing timely renewals and strategic upsells—maximizing both customer value and revenue potential. Partners are the trusted advisors who can help unlock business outcomes for these important customers, and prioritizing Cloud Solution Provider (CSP) partners is our primary motion to help you capture this opportunity.
As we shared at Microsoft Ignite 2024, our estimates based on IDC data indicate that the total addressable market (TAM) for small and medium-sized businesses (SMB) in the 2025 fiscal year (FY25) is $661 billion*, with $467 billion in cloud solutions—and growing fast.
A key moment to tap into the TAM opportunity is renewal time, which is a pivotal part of the customer journey. In fact, Microsoft internal data shows that the revenue recapture rate is 20% higher for timely renewals compared to late renewals. While the significant revenue potential of timely renewals is a major benefit, it’s equally important to recognize the value they can bring to customers. Proactive renewals present an opportunity to engage them early, sharing valuable business scenarios that can help increase productivity and deliver more efficiency while operating securely and ensuring their AI-readiness and acceleration.
CSP partners can maximize revenue and efficiency by thinking about renewals across two priorities: first, upselling to high-propensity customers when possible, and second, renewing remaining customers on time to ensure the greatest optionality and continuity for existing customers. As a reminder, successful renewal and upselling efforts can span up to three months or more depending on complexity, so we encourage you to start conversations early.
A phased approach to engagement
To help you make the most of this busy go-to-market time, there are several resources and offers that can help close upsells and renewals. We believe a phased approach will help customers continue their AI, security, and data journeys while assisting partners in unlocking incentives and pipeline growth.
1. Identify renewal and upsell-ready customers
If you haven’t already, be sure to use powerful targeting and propensity tools available to you while developing an account planning strategy:
- Microsoft 365 Lighthouse provides an intuitive, scalable customer management tool with recommendations for renewals and upsells. It helps you manage customers both individually and in bulk, whether you’re a direct bill partner or an indirect reseller.
- Microsoft CloudAscent offers cohort-based targeting, providing insights into customer clusters as well as recommended upsell and renewal opportunities.
Lighthouse and CloudAscent work even better when used together, giving you a comprehensive view of your customers' needs and helping you to act swiftly.
2. Analyze “AI-ready” sales scenarios and upsell priorities
- After identifying high-propensity and renewal customers, you should determine where they are in their unique AI transformation journey. By understanding their current stage, you can tailor your approach to meet their specific needs and assess readiness.
- Next, review the prioritized sales scenarios to pinpoint the most suitable upsell opportunities and related promotions. This targeted approach can assist your organization to engage in productive and meaningful conversations with customers, helping to drive successful outcomes and foster long-term relationships.
3. Use promotional offers to help close your deals
In Q3, we introduced a series of offers—including "new to Microsoft 365 E3 and Microsoft 365 E5"—to help you win more new customers and renewals and upsell existing customers.
Upsell to Microsoft 365 E3 promotion
E3 is enterprise productivity software with advanced security and compliance capabilities, designed for business efficiency. With the Do More with Microsoft 365 E3 Accelerate promo, CSP partners can offer 15% off E3 for eligible new-to-E3 customers. This continues to be a great opportunity for partners to position this offer to re-engage with existing customers to consider upgrading for a secure productivity solution.
Upsell to Microsoft 365 E5 promotions
E5 Accelerate promotion: Help advance your customers’ security with 15% off E5. E5 is a powerful cloud-based security solution that delivers AI-powered protection designed for large organizations. To further support your customers' AI transformation, we're offering 15% off "new-to-offer" E5 customers until June 30, 2025. This upselling opportunity is for first-time purchases and includes up to 2,400 seats.
E5 Compliance discount: To help you recreate specialized data security offerings, we have a 50% discount on E5 Compliance for customers with Microsoft 365 Copilot licenses. The promo is available through February 1, 2026, for new and existing customers who previously purchased Copilot without E5 Compliance. Customers who purchase Copilot licenses can purchase an equal or lesser number of E5 Compliance licenses at the 50% discount.
To learn more about eligibility and terms for these offers, as well as others, review our Global Promo Readiness Guide. Additionally, the Offer Landing Kit and Copilot Partner Services Blueprint provide resources to position the promotions as standalone offerings or to easily bundle them with additional services, providing a comprehensive solution for customers to get started quickly and confidently.
4. Boost earnings with CSP partner incentives
In FY25, we pooled our incentives to clearly align our strategy across the five Microsoft AI Cloud Partner Program priorities, and 70% of our total incentive spend is directed to partners that serve the SMB and small and midsize enterprise businesses segments.
CSP partners with a Modern Work designation can earn incentives by selling Microsoft products across the Data & AI (Azure), Modern Work, and Security solution areas. The standard incentive rate is competitive and includes increases for strategic products such as Copilot, Microsoft 365 Business Premium, E3, and E5. Additionally, there is a significant boost available when acquiring new cloud customers, which can raise the incentive rate.
5. Invest in skilling your technical and sales teams
In addition to our full catalog of technical and sales training, we’ve created skilling offers specifically to help accelerate partner capability to serve small and midsize enterprise customers. Upskill and reskill with offers that include:
- Level Up CSP partner sales bootcamp: This is a new Modern Work Copilot SMB sales champion learning path.
- CSP partner seller bootcamps: These virtual skilling events focused on renewals include SMB sales bootcamp (on demand) and the Level Up CSP partner bootcamps, which you can find on the listing page (upcoming live and virtual).
- CSP partner certification weeks: You can explore these at the skilling hub.
- SMB reseller skilling opportunities: Assets include learning journeys, skilling cheat sheets, and campaign blurbs. Explore these resources here.
6. Engage with customers using ready-to-deploy renewal assets
We are excited to announce the launch of our new Accelerate CSP Renewals campaign in a box —for direct and indirect providers—now available for partners, including resellers. This comprehensive set of tools and resources is designed to streamline the renewal process and empower account managers with customizable, ready-to-deploy outreach materials.
The campaign in a box includes the tools you need to guide your partner ecosystem and customers through the renewal and upgrade process. It features a variety of assets to support your to-partner and through-partner renewal efforts, including:
- E-books to provide in-depth information and insights.
- Email templates to facilitate initial outreach.
- Reminder emails to ensure follow-up and engagement.
- Next actions emails to provide your partners with renewal assets and guide your customers through the final stages of the process.
- Execution guides to help you and your partners implement the campaign effectively.
You can also use no-cost, co-branded marketing campaign resources that help generate leads and build your pipeline with minimal effort. Discover the Copilot SMB and Defend Against Security Threats campaigns in a box today.
As we wrap up our discussion on CSP renewals, I want to personally invite you to join an upcoming webinar titled Accelerate CSP Growth with Enterprise customers and new Copilot value. This session is designed to supercharge your CSP partner business growth.
Hosted by Jeremy Welch, GM of Modern Work and Business Applications Field & Partner Marketing, and myself, this webinar will feature new Microsoft 365 offers and promotions that can help you grow your Copilot, E3, and E5 sales with medium enterprises. We'll also share the latest updates in Copilot and agents, helping you drive customer engagement using the newest capabilities and go-to-market resources.
This is an incredible time to be a Microsoft partner. IDC’s "Microsoft Partners: Driving Economic Value and AI Maturity" paper1 revealed that software organizations are recognizing the immense business value of generative AI. One of the key findings is that for every $1 of Microsoft revenue, partners who provide services generate $8.45, and those who develop software make $10.93.
This renewal moment is critical, and we are committed to helping you accelerate your go-to-market success and capitalize on this significant SMB opportunity. As leaders in AI innovation and with a product pipeline primed to transform any business, Microsoft and your partner teams are here to position your business for growth and deliver greater customer value starting today.
To learn more, join in on the conversation by following our Partner Community CSP discussion board.
*Throughout this document, $ refers to US dollar (USD).
1IDC White Paper, sponsored by Microsoft, “Microsoft Partners: Driving Economic Value and AI Maturity,” IDC #US52483124, September 2024.